Self-Driving Alliances Multiply: Nvidia, Baidu Deepen Their AI Pact

Baidu (BIDU) will use Nvidia (NVDA) tech in its cloud-computing platforms and self-driving vehicles. The pact, announced Wednesday, expands an existing partnership between the two tech companies and fuels momentum for autonomous technologies.

Autonomous or self-driving technology is too complicated and too important to do it yourself. At least that seems to be the message as automotive companies and technology firms such as General Motors (GM), Alphabet (GOOGL) and Intel (INTC) form self-driving alliances as they try to figure out where they need one another to fill in gaps in expertise.

The logic behind Detroit-Silicon Valley pacts is straightforward. Automakers know how to mass produce, distribute and market vehicles, as well as manage tens of thousands of factory workers, whereas tech giants have the edge on electronics, crunching data and rapid innovation.

Autonomous and partially autonomous cars will account for 12%-13% of global vehicle sales by 2025, representing a market for those features of roughly $42 billion, the Boston Consulting Group has estimated.

Here is a rundown of key "driverless car" alliances:

Nvidia-Automakers, Nvidia-Baidu

XChipmaker Nvidia (NVDA) and Chinese Internet company Baidu (BIDU) jointly announced Wednesday that they will work together on artificial intelligence (AI) technologies to power cloud data centers, self-driving cars and consumers devices such as home assistants.

Notably, the agreement calls for Nvidia's Volta GPUS to be used in Baidu Cloud and its Drive PX supercomputer to be used in Baidu's self-driving car efforts. Baidu simultaneously announced it now has over 50 partners on board its Apollo program, which aims to develop self-driving cars with major Chinese carmakers.

In June, Nvidia announced it is extending self-driving partnerships with European automakers Volkswagen (VLKAY) and Volvo, as well as car-parts maker ZF. The companies will work on advanced artificial intelligence systems for next-generation autonomous technologies.

Apple-Hertz

Apple (AAPL) is leasing six cars from a Hertz (HTZ) subsidiary for testing autonomous software, reports in late June said.

While Apple recently confirmed it is working on technology for self-driving cars, it was not clear whether the company will make its own car or just produce the technology for automakers. Reports last year said Apple tried to partner with Daimler and BMW but was rejected.

Alphabet-Avis

Alphabet and car-rental company Avis Budget (CAR) announced in late June they will work together on self-driving cars. Alphabet's self-driving car unit, Waymo, will rely on Avis to service and store its fleet of Chrysler Pacifica minivans as part of a pilot program in Phoenix, Ariz.

Alphabet-Lyft, General Motors-Lyft

In May, Alphabet's Waymo said it would partner with Lyft. Details of the tie-up are sketchy, but it threatens a ride-sharing rival Uber. Waymo is also engaged in a legal spat with Uber.

Uber has partnered with German automaker Daimler AG (DDAIF) and Japanese automaker Toyota Motors (TM) for new mobility solutions. It has also reportedly chased self-driving deals with Tesla (TSLA), Fiat Chrysler (FCAU), General Motors (GM), Ford Motor (F) and others.

Meanwhile, in January 2017, General Motors invested in Lyft to spur deployment of its cars in autonomous ride-sharing fleets. In February 2017, Ford said it would invest $1 billion in an obscure startup, Argo AI, to build fully self-driving cars. In April 2017, Fiat Chrysler delivered minivans for Waymo-Alphabet's self-driving program.

BMW-Intel-Mobileye-Delphi

In mid-May, BMW Group, Intel (INTC) and Mobileye (MBLY) announced that they will partner with Delphi Automotive (DLPH) to bring autonomous driving solutions to multiple automakers.

Delphi will play a key role in integrating the solution delivered by BMW, Intel and Mobileye into OEM (original equipment manufacturer) vehicle architectures, the companies said in a joint news release. It also may provide components such as sensors and help with customizations to help vehicle brands differentiate themselves.

The Delphi partnership is seen as likely to benefit smaller car companies lacking resources to build their own systems.

Mobileye, which produces camera-based driver-assistance systems, joined forces in July 2016 with Intel and BMW to make self-driving cars a reality in about five years. In August last year, Delphi and Mobileye teamed up to make turnkey autonomous systems for auto and truck makers.

Then in March 2017, Intel decided to acquire Mobileye in a $15 billion deal, capitalizing on the Israeli tech firm's driver-assistance and anti-collision expertise.

Qualcomm-NXP

In October 2016, Qualcomm (QCOM) agreed to acquire NXP Semiconductors (NXPI), the largest automotive chip supplier, for $47 billion. The mega chip deal is expected create the industry's largest portfolio of sensors, networking and other elements vital to autonomous driving.

Tesla

Elon Musk's Tesla combines auto-manufacturing expertise and technological expertise into one package. The electric carmaker touts its vehicles as having the hardware needed for full self-driving capability, while also testing autonomous technology on the roads, with plans to take it mainstream.

Tesla counts Nvidia, whose chips act as the brains of self-driving cars, as a partner. Tesla also partnered with Mobileye, until the two companies broke up over issues tied to Tesla's Autopilot hands-free technology.

But chief executive Musk is largely on his own as far as self-driving goals go.

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